R v S HC Hamilton CRI 2006-419-89 [2006] NZHC 1224 (12 October 2006)

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Introduction [1] Some preliminary observations on the evidence [10] The two frauds

(b) The Booth transaction [28] (c) The Hannon transaction [47] The Deed dated 15 November 2002 [73] Mr S ’s position [79] Analysis: Have the charges been proved beyond reasonable doubt?

(b) Count 2 [113] (c) Count 3 [129] (d) Count 5 [131] (e) Count 7 [144] (f) Count 8 [155] (g) Count 10 [163]

[1] In 2002, Mr S was a chartered accountant practising in Hamilton. The Crown alleges that, between 28 October and 31 December 2002, he participated dishonestly in two transactions. Those transactions are known as the “Booth” and “Hannon” transactions respectively.

[2] About a month before the trial, Mr S sought leave to apply for his trial to be heard by a Judge, sitting without a jury. The Crown did not oppose that application. I made orders granting leave to apply and ordering that Mr S be tried before a Judge alone: see s 361C(2)(c) and (5) of the Crimes Act 1961 (the Act). Because I had heard and determined a number of pre-trial applications, I indicated that I would consider any objection to my conducting the trial. Mr S did not object.

[3] The trial took place during the week commencing 18 September 2006. At the beginning of the trial, Mr Douch, for the Crown, indicated that he did not intend to call evidence to support two money laundering counts. Accordingly, I discharged Mr S under s 347 of the Act on counts 4 and 9 of the indictment.

[4] That left eight charges for determination: three counts of using a document with intent to defraud, two counts of forgery, two counts of uttering a forged document and one count of unlawfully making a document.

[5] At the close of the Crown case, Mr Douch accepted that count 6 of the indictment rested substantially upon the same factual foundation as count 5. For that reason, he indicated that he did not intend to pursue count 6. In light of that indication, I discharged Mr S on count 6 before an election whether to call evidence was made.

[6] At the conclusion of the trial, seven charges remained live for determination. They were counts 1, 2, 5, 7, 8 and 10. Counts 2 and 3 were expressed as alternatives.

[7] Earlier today, I delivered in open Court verdicts on each of the charges. On counts 1, 2, 5, 7, 8 and 10 I found Mr S guilty. Having regard to the guilty verdict returned on count 2, no verdict was required on count 3.

[8] I am required to give reasons for the verdicts I have given. In R v Connell [1985] NZCA 34; [1985] 2 NZLR 233 (CA) at 237-238, the general obligation of a trial Judge (sitting without a jury) to give reasons was put as follows:

... a statement of the ingredients of each charge and any other particularly relevant rules of law or practice; a concise account of the facts; and a plain statement of the Judge's essential reasons for finding as he does. There should be enough to show that he has considered the main issues raised at the trial and to make clear in simple terms why he finds that the prosecution has proved or failed to prove the necessary ingredients beyond reasonable doubt. When the credibility of witnesses is involved and key evidence is definitely accepted or definitely rejected, it will almost always be advisable to say so explicitly.

The Court recognised, at 238, that those comments were being made at an early stage in the history of Judge-alone trials on indictment in New Zealand. The observations in Connell were not intended to be exhaustive or the last word on the subject.

[9] The nature of the judgment to be delivered on a trial by Judge alone was reconsidered in R v Eide (Note) [2004] NZCA 215; [2005] 2 NZLR 504 (CA). William Young J, delivering the judgment of the Court of Appeal said:

[21] The problems with short–form judgments are particularly acute in fraud prosecutions. The parties (that is, the prosecutor and accused) are obviously entitled to know the key elements of the Judge’s reasoning. In a case of any complexity, this will not be possible unless the Judge provides an adequate survey of the facts. As well, in this context a Judge is addressing an audience which is wider than the prosecutor and accused. If the verdict is guilty, the Judge should explain clearly the features of the particular scheme which he or she finds to be dishonest. There is a legitimate public interest in having the details of such a scheme laid out in comprehensible form. Similar considerations apply if the verdict is not guilty. Further, some regard should be had to how the case will be addressed on appeal. A judgment which is so concise that some of the key facts in the case are required to be reconstructed by this Court on appeal is too concise. We will indicate shortly a particular aspect of the present case that illustrates the problem. All of this points to the need for a judgment to be able to be read as a stand–alone document.

I have prepared these reasons in an endeavour to comply with those requirements.

[10] The Crown evidence comprised a number of witnesses who gave oral evidence of primary fact, others who provided uncontested written statements and some expert evidence from a computer analyst. The witnesses also produced a substantial number of documentary exhibits, including a statement given by Mr S to the Police on 3 December 2002.

[11] Mr S elected to call evidence but did not give evidence on his own behalf. Accordingly, the total pool of evidence I have had to consider includes that given by the three witnesses called on behalf of Mr S and the documentary evidence they produced.

[12] I will make relevant findings of fact when explaining the nature of the alleged frauds. Where necessary, I will provide brief reasons to support findings based on credibility or the reliability of witnesses. However, much of the background evidence is uncontroversial.

[13] Some preliminary comments are required in respect of two of the witnesses called by the Crown. The first is Ms Gibbs, a principal in a company called Legend International Brokers ’98 Ltd. That company was involved in the Hannon transaction. The second is Mr Orchard, a major participant in the frauds alleged by

the Crown and someone who has already been dealt with by the Courts in respect of his role.

[14] Mr Douch had intended to call Ms Gibbs to give oral evidence at trial. However, shortly before the hearing began, she gave birth. Medical advice meant that she was unable to travel to Hamilton or to attend at some other location to give evidence by video-link.

[15] Counsel agreed that her evidence could be provided in written form with the addition of a transcript of answers given by her to questions put by both Mr Douch and Mr McIvor, for Mr S , in the course of a telephone conference held during the hearing. Neither counsel required her answers to be verified on oath.

[16] The telephone conference was conducted in my absence, in case counsel were unable to reach agreement about admission of the transcript in evidence. No credibility issues arise out of the answers given by Ms Gibbs.

[17] My Associate was present during the telephone conference and, with my authority, made a shorthand note of the discussions before preparing the typewritten transcript which has been incorporated, by consent, as part of Ms Gibbs’ evidence.

[18] Mr Orchard was the prime mover behind the frauds perpetrated on both Mr Booth and Mr Hannon. He has already been convicted and sentenced by the Courts on over 600 charges involving dishonesty: see R v Orchard (CA123/03, 24 October

2003). Mr Orchard was described by the Court of Appeal, at para [12], as “a serious recidivist offender” who “considers his fraudulent behaviour to be a profession”.

[19] Mr McIvor submitted that Mr Orchard was unworthy of belief and that any evidence given by him that could implicate Mr S in fraudulent activity should be rejected outright. Mr Douch, while acknowledging Mr Orchard’s propensity to tell lies as part of his “profession”, submitted that there was a ring of truth about much of Mr Orchard’s evidence which was also corroborated, to a degree, by contemporaneous documents.

[20] To add strength to his submissions, Mr McIvor referred to a letter written by Mr Orchard from prison to a former counsel. The letter was put to Mr Orchard and produced as an exhibit through him. Mr Orchard wrote:

John S goes for trial in September and I have been asked to be a witness for the Prosecution of which I have no problem unless of course something in the dollar range finds it’s way into my bankaccount.

[21] Mr Douch submitted that there was no evidence that Mr Orchard had a vindictive nature, so there was no real likelihood that he would lie on oath to implicate Mr S in any offences which Mr Orchard knew he had not committed.

[22] Mr Douch submitted that the letter to which Mr McIvor had referred simply displayed the nature of Mr Orchard’s personality and the passage quoted in para [20] above ought to be regarded as no more than a flippant statement. In support of that submission, Mr Douch referred to a later passage in the letter in which Mr Orchard wrote:

On top of all this [the two police officers with whom he had met the previous Friday] offered me their condolences as my mother passed away late last year and nobody thought to tell me!

[23] The pleas of guilty Mr Orchard entered demonstrate that he has no difficulty in telling the most outrageous lies in order to deceive people into parting with their money. However, he has some perverse pride in the way in which he carries out his elaborate frauds and is prepared openly to discuss them. The nature of his personality, in that regard, suggests that much of his evidence about the way in which the frauds were perpetrated might be truthful.

[24] Nevertheless, I take a cautious approach to evaluation of Mr Orchard’s testimony. I am not prepared to act on Mr Orchard’s evidence unless it is confirmed in a material respect by contemporaneous documentary evidence, by another witness whose evidence I accept or is consistent with the general body of circumstantial evidence.

S ’s position is contained in a written statement given to Detective Browne on 3

[27] For present purposes, I acknowledge that if Mr S ’s statement were taken at face value the Crown could not prove beyond reasonable doubt that he was a knowing participant in the frauds.

[29] On 28 October 2002, Mr S provided a “Funding Proposal Summary” to Mr Craig Rolls of Basecorp Finance Ltd. Basecorp can accurately be described as a lender that is more concerned with obtaining adequate security for repayment of a loan than with identifying the borrower’s ability to service it. Mr Rolls’ recollection is that, because he received an original document, the proposal was delivered to him personally by Mr S . I accept that evidence as reliable.

[30] Mr S and Mr Rolls had known each other for some time, dating back to a period when Mr Rolls was working for Marac Finance Ltd in Hamilton. At that time, Mr S was with a firm of chartered accountants that occupied the same building as Marac. While I did not get the impression that Mr S and Mr Rolls were close personal friends, clearly a relationship of sorts existed between them. The degree of trust that existed was sufficient for Mr Rolls personally to advance, on an unsecured basis, significant sums of money to or for the benefit of Mr S . The evidence establishes that Mr Rolls had concerns, around the time of the Booth transaction, that some of the money he advanced might not be repaid.

[31] The proposal submitted by Mr S to Mr Rolls disclosed that Justin Murray Booth was the borrower. It gave an Auckland address for Mr Booth. The amount sought was “$75,000 plus capitalised interest” at a “suggested [interest] rate” of between 17 and 18% per annum, plus fees. The loan was sought for a period of four months on an interest only basis.

[32] The security offered was a first mortgage over the property at 66 Morrinsville Road. Mr S ’s proposal stated that the Morrinsville Road property was rented out for $180 per week. It described the purpose of the loan as follows:

Justin wishes to assist his friend Paul Cameron with a new project and to repay some of Paul’s short-term debt.

Beaurepaires for about 7 years and that he earned in excess of $35,000 per annum.

[34] The real Mr Booth knew nothing of the intended transaction. He did not authorise Mr S to make the proposal on his behalf. In evidence, Mr Booth denied that he knew Mr S , said he knew no one by the name of “Paul Cameron” and confirmed that he had never worked for Beaurepaires.

[35] Basecorp accepted and processed the application for finance. A solicitor in Auckland (Mr Umarji Mohammed) was instructed to act on the transaction. Mr Booth was to attend upon the solicitor to execute relevant documents.

2002. The facsimile header to the loan document confirms it was received by Mr Mohammed at 1.46pm on 29 October 2002. The documents included a “Term Loan Agreement”, showing Basecorp as lender and Mr Booth as borrower.

[37] The “Term Loan Agreement” reflected the proposal submitted by Mr S . The advance was for $75,000. The security was a first mortgage over the Morrinsville Road property.

[38] Shortly after Mr Mohammed received the loan agreement, a man presented himself at Mr Mohammed’s office purporting to be Mr Booth. That man was Mr Orchard. Mr Orchard accepts that he impersonated Mr Booth without his authority. At all times, Mr Mohammed believed that he was dealing with the real Mr Booth.

[39] At 2.03pm on 29 October 2002, Mr Mohammed received a facsimile from the offices of Drew Bullen, the firm of chartered accountants in Hamilton of which Mr S was then a partner. While the facsimile was unsigned, it provided instructions for the disbursement of the Basecorp funds.

[40] The document, in the form in which it was sent, authorised disbursement of the $75,000 loan as follows:

The amount to be credited to Kona Wind Ltd was stated as $30,000. The amount to be paid to Mr Dawick was stated as $39,000.

[41] As a result of discussions between Mr Mohammed and Mr Orchard, the authority was amended in hand by the latter. In its amended form, $28,376 was to be paid to Kona Wind Ltd and $44,000 to Mr Dawick. A minor increase was made to Mr Mohammed’s fees and a direction to pay outstanding rates was given.

[42] I am satisfied from the evidence that Kona Wind was a company with which Mr S was associated, while Mr Dawick was being used as a conduit to channel money to Mr Orchard in return for a modest fee.

[43] Mr Mohammed prepared a mortgage over the Morrinsville Road property. That document is also dated 29 October 2002. Both the loan agreement and the mortgage were signed by Mr Orchard as if he were the real Mr Booth. Mr Mohammed witnessed the execution of both documents.

[44] Although, Mr Mohammed took steps to ensure that the person executing the documents was the real Mr Booth, he was deceived by the use of a false passport presented to him by Mr Orchard. The passport was in Mr Booth’s name but contained Mr Orchard’s photograph.

[45] Basecorp, through Mr Rolls, issued cheques in favour of Kona Wind and Mr Dawick. Consistent with my findings, Mr Rolls believed Kona Wind to be a company associated with Mr S and a business associate/client, Mr Terry Smith. Mr Rolls’ understanding was that Kona Wind owned fishing vessels in Fiji. While he was unsure of the precise ownership details, he was aware that the vessel was owned by an entity associated with both Mr S and Mr Smith.

[46] The Crown case is that Mr Booth was defrauded of part of his equity in the Morrinsville Road property by an impersonation fraud to which Mr S was a knowing and dishonest participant.

[47] The real Mr Richard Hannon was born on 4 August 1916. In 2002, he was an elderly and wealthy farmer, residing near Cambridge. He too was the subject of an impersonation fraud to which the Crown alleges Mr S was a party.

[48] Sadly, Mr Hannon died before trial. In a written statement admitted in evidence by consent, Mr Hannon confirmed that he was the owner of the property near Cambridge on the security of which an advance was sought. He said that, due to his financial position, he had not borrowed money for over 40 years.

[49] Mr Hannon added that he had never “had anything whatsoever to do with an accounting firm called Drew Bullen or an Accountant by the name of John S ”. He was shocked to learn that someone had used his identity to raise a loan to be secured over his property and confirmed that he had not given authority to anyone to do that.

[50] On the morning of 6 November 2002 an approach was made, by telephone, to Ms Gibbs of Legend International Mortgage Brokers ’98 Ltd by a man purporting to be Mr Hannon. He was seeking to raise a substantial sum of money for urgent bridging finance. The reason given was that he needed to assist his son “with a pressing legal issue”. After some discussion, it was agreed that the advance sought would be $400,000.

[51] The man who called himself Mr Hannon told Ms Gibbs that he owned ten properties, all of which were unencumbered. A property situated at 191 Hannon Road, Cambridge was offered as security for the loan.

[52] Ms Gibbs was told that Mr S was Mr Hannon’s accountant. Contact details for Mr S were provided to Ms Gibbs. Following that initial contact, Ms Gibbs sent a request, by facsimile, for disclosure of Mr Hannon’s relevant financial information to Mr S . That request was accompanied by an authority for Legend to act on Mr Hannon’s behalf and a Privacy Act waiver. A waiver was

required to enable Legend to make inquiries into Mr Hannon’s credit history before processing the loan application.

[53] Later that day, Mr S forwarded, by facsimile, the documents requested by Legend. Mr S ’s facsimile was addressed for the attention of Ms Gibbs.

[54] The facsimile transmission sheet contained the logo of the firm of chartered accountants of which Mr S was then a partner. All documents were sent from the firm’s facsimile machine. The body of the cover sheet read:

As requested I attach the information requested in your fax. Please [note] that some of the information is in a different format but covers the same questions.

Mr Hannon’s income for the 2003 year will include profit on subdivision of land into rural blocks.

Should you require more information or detail please feel free to contact the writer.

[55] Mr S ’s facsimile was sent at 10.54am on 6 November 2002. The following documents (totalling over 20 pages) were forwarded with the cover sheet:

b) Farm accounts for the year ended 31 March 2002. While those accounts did not contain any client name, plainly they were intended to represent “Mr Hannon’s” financial position to Legend.

[56] On the faith of that information, Ms Gibbs arranged for a loan to be obtained from Yidam LLC, an American company based in Colorado.

[57] Before final authority to advance the loan was given by a representative of Yidam (who happened to be in New Zealand), a number of telephone calls took place. They involved (not necessarily at all times) Ms Gibbs, Mr Bramell (Yidam’s representative), a solicitor from a firm in Auckland acting for Yidam, the man purporting to be Mr Hannon and Mr S .

[58] Ms Gibbs recalls asking Mr S a number of questions about financial aspects of the transaction. She says that he was always able to answer questions put to him. Mr S did not mention any other person acting on behalf of Mr Hannon. Nor did he suggest any other intermediary was involved.

[59] When Legend carried out a credit check on Mr Hannon, Ms Gibbs discovered that it was the first inquiry ever made. She thought that was unusual. She spoke to Mr S . He advised her that he had a number of clients who had limited inquires about their credit. He assured Ms Gibbs that all was well. Further inquiries were made by Legend. As a result of those inquiries Legend was satisfied that Mr Hannon was a well respected individual.

[60] Once loan approval was given by Yidam (also on 6 November 2002) Ms Gibbs sent by facsimile to Mr Hannon a loan offer in the sum of $400,000. The third page of the document contained a declaration by the borrower to instruct Legend to proceed with the advance.

[61] That declaration was signed in Hamilton, also on 6 November 2002, by someone purporting to be Mr Hannon. When signed that document was returned by facsimile to Legend. The facsimile header discloses that it was forwarded to Legend at 7.32pm.

[62] Legend did not seek proof of identity from Mr Hannon. It left that to the solicitors who were acting for Yidam.

[63] Bruce Dell Law, a firm of solicitors in Auckland, were instructed to act for “Mr Hannon”. The solicitors for Yidam forwarded loan and mortgage documentation to that firm to evidence “an advance of $420,000, discounted to

2002. The person with whom she met was Mr Orchard. When he attended upon Ms Jenkin, Mr Orchard presented a driver licence to her to establish that he was Mr Hannon. When she gave evidence, Ms Jenkin was asked to compare the photographs shown on the licence and in Mr Orchard’s passport, Ms Jenkin identified Mr Orchard as the person who, in fact, executed the mortgage. Mr Orchard accepted that was so.

[65] Believing that she had verified Mr Hannon’s identity, Ms Jenkin arranged for the imposter to execute mortgages over the real Mr Hannon’s property. After that was done, she reported to the lender’s solicitors. Later that day, a sum of $385,750 was paid into the trust account of Bruce Dell Law, being the net proceeds of the loan.

[66] Ms Jenkin sought instructions on disbursement of funds from her firm’s trust account. Understandably, Ms Jenkin required a signed authority before the moneys were disbursed.

[67] Ms Jenkin deposed that Mr Orchard asked her to contact his accountant. He provided Mr S ’s name. She recorded Mr S ’s name and telephone number on her file. The telephone number given to her matches the telephone number of Drew Bullen, Mr S ’s firm at that time.

[68] Ms Jenkin telephoned the number provided and spoke, twice, to a man who identified himself as Mr S . On the first occasion, Ms Jenkin sought clarification about the property over which the loan was to be secured. Mr S

advised Ms Jenkin that one of the titles was, in fact, owned by Mr Hannon’s brother. The second conversation concerned disbursement of funds.

[69] After the second telephone discussion, Ms Jenkin received a document authorising the disbursement of funds from her firm’s trust account. The relevant authority was purportedly signed by Mr Hannon and reflected the information provided by Mr S . However, Ms Jenkin could not recall whether the authority was received by facsimile or directly from Mr Orchard.

[70] Although there is no primary evidence that Mr S sent the disbursement authority to Ms Jenkin, a copy of the authority was located on the Drew Bullen computer system. A computer analyst, Mr Bennett, confirmed that the document was created on 8 November 2002. In the form in which it was located on the Drew Bullen computer system, the document read:

I hereby authorise you to disburse the balance of the $400,000.00 loan advance received via Hesketh Henry to the following accounts:

Name of Account	Bank	A/c Number	Amount
Bruce Dell Law	Fees and disbursements
Hugh Fraser	Southern Cross Building Society - Ham	1720713	20,000.00
Sherwood Autos Ltd	National bank – Hamilton	060 583 0588239 00	29,300.00
T & M Smith (t/a Albacora Fiji)	ANZ – Tauranga	010 373 0027265 00	49,000.00
Campus Pack	BNZ	020 456 0059385 097 (Balance)

[71] The authority which came into the possession of Ms Jenkin was signed by “Mr Hannon” and was in a form that had been amended by hand. The amended authority required the monies advanced (after deduction of relevant costs) to be

disbursed to Hugh Fraser ($20,000), Sherwood Autos Ltd ($29,300) T & M Smith (t/a Albacora Fiji) ($49,000) and “Campus Pack” (shown as “Tobias Muir” with the word “net” before “balance”).

[72] Mr Orchard’s evidence was that “Hugh Fraser” was another alias used by him; that money was paid to Sherwood Autos Ltd to complete the acquisition of a vehicle by him; the $49,000 for Mr and Mrs Smith was a payment to Mr S for “doing the work” and that the balance was to go to a Mr Muir, who was to launder the money, in the same manner as had Mr Dawick in the Booth transaction, for Mr Orchard’s benefit.

[74] A document dated 15 November 2002 was prepared by Mr S . It purports to record an agreement among Mr Hannon, Mr S and Mr T and Mrs M Smith, the latter in their capacities as trustees of the Albacora Trust.

[75] The agreement appears to record an arrangement whereby Mr Hannon was to lend $50,000 to enable the trustees of the Albacora Trust to operate two vessels, Albacora and Dolphin Free. In consideration for that loan, Mr Hannon is stated to have an option to purchase into, or invest on the same basis as any other “seed money funder”, in a Fijian tourist resort being investigated by Mr Smith. The resort venture was said to be “only at an initial investigation stage”.

[76] Mr S is recorded to have agreed “to arrange for repayment of the loan on its due date”, 120 days after the advance was made: cl 3. Security for the loan was stated to be assignment of certain rights to the fishing catch.

November 2002. It alleges that, on that date, Mr S saved this document on his computer at the offices of Drew Bullen.

[78] The Crown alleges that the agreement was drawn up by Mr S , without lawful authority, in an endeavour to provide evidence to substantiate his later claims of involvement in an honest transaction.

11.15am and concluded at about 6.00pm. The written statement is recorded in the Detective’s handwriting (with some amendments or additions made by Mr S ) and runs to some 21 pages. The statement was signed by Mr S in the presence of Detective Browne. Mr S wrote, immediately above his signature:

I’ve read this statement and it is true and correct to the best of my knowledge.

[80] Before he was questioned, Mr S was cautioned. He was told that he had the right to consult a solicitor and speak to him or her in private and without delay and that he could refrain from making a statement. Having been given that caution, Mr S elected to make a statement. He did not require a lawyer to be present.

[81] Mr S was asked about his role in both transactions. Initially, Detective Browne asked about the Hannon loan, inquiring how it unfolded. Mr S said that a man called “Paul Adams” (another alias used by Mr Orchard) knew that he was looking for money for his client, Albacora Trust. As mentioned earlier, the trustees of Albacora Trust are Mr and Mrs Smith.

A. He knew I was looking for funding for Smith, his fishing deals. I assume he found out through one of the brokers I’d been making enquiries to obtain funding through Tilson or McKelvy or Bill

Sterling. They would all talk amongst themselves and know I was seeking funding. Paul Adams came to see me, said a friend of his owned the property. The friend had a bad credit rating and wanted to raise some short term funding. With banks they always want a reason for the loan, but with Basecorp Finance it is not so critical, then they would go back to the bank in a few months time and replace the loan. In that time my client’s loan would be repaid.

[83] Detective Browne asked Mr S whether the Mr Booth to whom he referred had a property at 66 Morrinsville Road. Mr S responded that he did. He said Mr Booth told him he was a tyre repairer who worked in Auckland. The interview continued:

Q. Now how can Mr Booth taking out a mortgage finance on his house become funding for your client, Albacora and Mr Smith?

A. Oh, there was some talk of Mr Booth getting a job on one of the fishing boats. He was raising money on his house. He would advance funds to Albacora Trust 29,000 and also obtain a job working on the boat, a chance to earn some good money next time there was an opportunity.

A. Yes, probably on the computer there will be under Albacora Trust. Q. So what did you know of Paul Adams?

A. Well not quite. He approached me because he knew I was looking for funding for my clients.

A. No, I didn't know. He approached me with a client, Mr Booth, who had an unencumbered house who was looking to raise finance and invest – on the surface very plausible.

Q. You still haven't told me how you were introduced to Mr Adams, business is done through introductions.

A. I honestly can't remember. It probably could have been through one of the brokers who knew I was looking for funding.

A. Booth was a mate of his. I assume he would get some sort of fee from Booth. He, Mr Adams, was helping his mate, Mr Booth, out of trouble.

A. Just doing the cover sheet, funding proposal and forwarding it to Basecorp Finance. I don’t know if I faxed it down to them or Paul Adams took it down because Mr Booth was in Auckland. It's just round the corner. It’s possible I took it down myself.

[84] Later in the interview Mr S accepted that he spoke to Mr Mohammed about disbursement of the funds. Mr S denied, however, that he represented himself to Mr Mohammed as Mr Booth’s accountant or agent. Mr S denied preparing the original authority to disburse funds. That authority showed that

[85] Mr S confirmed to Detective Browne that he was both director and shareholder of Kona Wind.

[86] Initially, Mr S also said that he did not think he sent anything by facsimile to Mr Mohammed’s office. When confronted with the fact that the disbursement authority was sent by facsimile from his firm’s office to Mr Mohammed, Mr S accepted that, if it had been faxed from the firm to Mr Mohammed, he would have undertaken that task.

[87] In short, in relation to the Booth transaction, Mr S ’s position is that he believed, at all material times, that the transaction was being undertaken on behalf of the real Mr Booth, a person whom he had met in the presence of Mr Adams (Orchard).

[88] After discussing the Booth transaction at some length, Detective Browne reverted to the topic of the Hannon transaction:

property, needed a loan because his son was in the crap and knew about finance companies that sort of thing.

A. A bit like the Booth loan. You are approached by someone who is in trouble and requires a loan to get them out of financial trouble.

Q. How does that then translate to them investing this loan money with your clients?

A. No, Mr Adams approaches that he has someone interested in loaning funds to Albacora Fisheries. He then says they’re doing a loan to get this guy’s son out of the crap so we could wrap it all up in one. He didn’t disclose what sort of crap or trouble his son was in.

A. He asked me to fax up the information to Legend International. Q. What information was that?

A. It was about 20 pages, accounts, copies of titles. Q. Initially what was the proposal?

Q. Now this is a document between Richard Hannon, John S , yourself, Terrence Smith and Marcia Smith trustees of Albacora and Terrence Smith?

Q. And Richard Hannon has a copy of this document? A. I would expect the real Richard Hannon doesn’t.

Q. You have documentation on your file signed by Richard Hannon, how have you come by these documents?

Q. Do you have written authority or set of instructions from Mr Hannon to carry out negotiations or work regarding to this loan?

A. No, there isn’t. There was an inference that I would be carrying out work in the future for him.

A Well, no I couldn’t act for the guy in this instance because we were borrowing money off the guy but it doesn’t stop us faxing something for him.

[89] Mr S was asked again where the “inference” that he “would be carrying out work in the future” for Mr Hannon came from. Mr S said it came from Mr Adams, though he now realised it was a “big carrot” so that they would work together:

A. No, now I understand why they got me to fax documents away. I think the broker asked me a couple of questions about the loan. I think I phoned Paul Adams to find out the answer, something about the assets.

Q. Why are you phoning Paul Adams to find out this answer? Why don’t you call Richard Hannon?

A. I wouldn’t normally be talking to Hannon, it would normally be the broker doing it.

A. Because he is not party to the agreement, he may have a separate agreement with Hannon.

Q. Were you tied up in conference calls with Bryan Bramwell sic? He works for Yidam Finance the lenders?

A. He asked me questions about the statement of assets and liabilities, about why the land wasn’t recorded on the asset statement. He was asking about the fixed asset schedule. The tie up between the land and the fixed assets, and the third question was about the livestock.

A. That Hannon had prepared the asset statements and attached the financial statements.

A. They’re not on letterhead. I am surprised the lenders didn't want an original set otherwise they tend to tie in, they balance.

Q. On the hand written list of assets and liabilities, it is pretty sparse but assets are listed as a Range Rover, value $90,000.00. Tractor valued

Road, value 1.5 million. A life insurance of 1.5 million, and furniture and personal effects, $100,000.00?

Q. On the schedule of assets and liabilities also in your file and faxed to Legend International, the assets are quite markedly different. Do you agree?

A. Well the hand written document is not complete. I would presume the broker would do another on their own form.

A. No, no they would get the borrower to fill it out or then may go to their accountant.

Q. You received a request from Legend International, the company brokering the $400,000.00 loan between Hannon and Yidam Limited, asking for income and expenditure, statement of position, general questionnaire, proof of income, government valuation, registered value, title and rates demand?

Q. Yes, at the request of the finance company? A. No, I was asked by Adams to fax it through.

Q. I have a document here, a fax you have sent to Legend International, Carolyn Gibbs. It is in response to her asking you for proof of income for Mr Hannon. Is that correct?

Q. The fax reads “As requested, I attach the information requested in your fax. Please note that some of the information is in a different format but covers the same questions. Mr Hannon’s income for the

2003 year will include profit on subdivision of land into rural blocks, should you require more information or detail, please feel free to

Q. No, I am saying that by you, John S , a chartered accountant at Drew Bullen, faxing away a covering letter on company letterhead and attaching with it 20 odd pages of assets and liabilities are giving some credence to those documents. For all intents and purposes the person receiving those documents believe they are real assets and liabilities statements for the real Richard Hannon, correct?

[90] Mr S subsequently reinforced his belief that the 20 odd pages faxed to Legend represented the real assets and liabilities of Mr Hannon and that he had no reason to question the veracity of the financial statements.

[91] While Mr S accepted that he never met the real Mr Hannon, his position is that he honestly believed that the real Mr Hannon was involved in the transaction. Further, he accepts that, at Mr Adams’ (Orchard’s) request he held himself out as being Mr Hannon’s accountant.

[92] Mr S explained that was because Mr Hannon did not want his own accountant to know what he was doing. Mr S believed that Mr Hannon was embarrassed by having to extricate his son from a legal problem. Those beliefs must

have originated from information imparted to him by “Mr Adams”, as Mr S had no direct contact with anyone claiming to be Mr Hannon.

[93] Mr S accepted that the authority to disburse funds was drawn up by him from information given to him by “Mr Adams”, on behalf of Mr Hannon. He accepted that $49,000 was to be paid for the benefit of Mr and Mrs Smith, apparently in their capacities as trustees of the Albacora Trust.

[94] Taking into account the lender’s fee of $1,000 the amount paid to the trustees corresponds exactly to the $50,000 advance recorded in the Deed dated 15

B. Richard has agreed to provide loan funds for the operations of the vessels to the trust. In consideration he also has an option to purchase into or invest on the same basis as any other “seed money funder” into a Fiji tourist resort venture currently being investigated by Terry, this venture is only at a initial investigation stage.

C. John has agreed to arrange for repayment of the loan on its due date. D. The owners will repay the lender by assigning certain rights to the

E. The parties have agreed to certain arrangements, terms and conditions pursuant to which this agreement will be performed and these are set out in this agreement.

JOHN KENNETH SLAVICH on or about the 28th day of October 2002 at Hamilton or elsewhere in New Zealand with intent to defraud used a document capable of being used to obtain a benefit namely a Funding Proposal Summary addressed to Basecorp Finance Limited dated 28 October

2002 for the purpose of obtaining for himself or for any other person a benefit.

[96] The charge is brought under s 229A(b) of the Act, in the form it appeared prior to amendments made to the Act in 2003. Section 229A(b) provided:

Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to defraud,—

(b) Uses or attempts to use any such document for the purpose of obtaining, for himself or for any other person, any privilege, benefit, pecuniary advantage, or valuable consideration.

[97] The Crown must prove, beyond reasonable doubt, that Mr S used the “Funding Proposal Summary” dated 28 October 2002 for the purpose of obtaining a benefit for himself or for some other person with an intent to defraud.

[98] “Use” of a document can arise from the provision of a document to a person from whom money is sought: see R v Baxter [1998] 3 NZLR 144 (CA) at 153.

[99] In order to establish that the accused had an intent to defraud, the Crown must prove, beyond reasonable doubt, that he acted deliberately and dishonestly: eg R v Speakman (1989) 5 CRNZ 250 (CA) at 258-259 and R v Firth [1998] 1 NZLR

[100] On the basis of Mr Rolls’ evidence and Mr S ’s statement, I find that Mr S delivered the Proposal to Basecorp and handed it to Mr Rolls. The Proposal was, plainly, a document. It was capable of being used (and was, in fact, used) to obtain a benefit for some person, namely the provision of mortgage finance. On the best view of the case, from Mr S ’s perspective, it was used to obtain a benefit for those involved in the off-shore fishing venture. While it is unnecessary to prove that money was actually advanced on the faith of the document, in this case it was.

[101] On count 1 the only issue is whether the Crown has excluded the reasonable possibility that Mr S dealt with a person whom he honestly believed to be Mr Booth. If that reasonable possibility has not been excluded, Mr S must be acquitted on count 1.

[102] Mr Orchard’s evidence was that he was the sole impersonator of Mr Booth. He deposed that Mr S knew that he was assuming Mr Booth’s identity in order to obtain money from Basecorp. Mr Orchard said that he was known to Mr Rolls, having had a prior “misunderstanding” with him. For that reason, he could not “front with” Mr Rolls for the purpose of the transaction. Mr Orchard said that Mr Rolls knew him under at least three names, “Orchard”, “Adams” and a Maori name he had used in the past.

[103] Mr Orchard needed a respectable person to deal directly with Mr Rolls. He says he recruited Mr Dawick to launder the money and Mr S to deal directly with Mr Rolls in procuring the loan. Mr S accepted that he had met Mr Orchard (using the name of Adams) on a previous occasion, though I emphasise that there is no evidence that Mr S was involved in any prior fraudulent activity that may have been undertaken by Mr Orchard.

[104] Mr Orchard said that he met Mr S at the premises of Burger King in Chartwell Square, Hamilton. Both he and Mr McKelvy (an associate of Mr Orchard) were present. Mr Bullen, a former partner of Mr S at Drew Bullen, confirmed in his evidence that Mr McKelvy was regarded as an undesirable person to be associated with the firm and that the only work that was done, to his knowledge, by

[105] The proposed transaction involving Mr Booth was, Mr Orchard says, discussed at that meeting. Mr Orchard recalls that Mr McKelvy introduced Mr S and told him that Orchard’s name was “Justin Booth”.

[106] If Mr Orchard’s evidence on that issue were accepted, Mr S must have known that Mr Orchard was impersonating Mr Booth. He would have known that Mr Orchard was not Mr Booth because the person to whom he was being introduced as “Justin Booth” was known to him as “Paul Adams”.

[107] The statement given by Mr S to Detective Browne is the only evidence of any meeting that Mr S may have attended at which both Mr Orchard and a person pretending to be Mr Booth were present. While Mr McIvor criticised the Detective for not asking Mr S for a description of the man he said was Mr Booth or for further information that might identify him, the fact that those inquiries were not made does not assist evaluation of what evidence remains.

[108] I am satisfied, beyond reasonable doubt, that Mr S knew that Mr Orchard was impersonating the real Mr Booth and that Mr S used the funding proposal document in order to gain a benefit for himself or the interests associated with the Smiths by obtaining almost $30,000 for the fishing venture.

[109] I do not need to make any finding as to whether the money paid to Kona Wind was directly for Mr S ’s benefit. So long as the document was used with intent to gain a benefit for someone, that is enough.

[110] The explanation given to the Police by Mr S is, in my view, implausible. It is a contention that cannot be substantiated having regard to the following evidence, all of which tends to support Mr Orchard’s testimony:

b) Mr S ’s object was to obtain money for the fishing enterprise with which he was in some way associated. In his statement to the Police, Mr S acknowledged that he was a director and shareholder of Kona Wind.

c) There is no credible evidence to explain why any Mr Booth would mortgage an unencumbered property to provide money to an entity associated with Mr S and to Mr Dawick.

d) Mr S delivered the proposal for funding to Mr Rolls with intent that it be acted upon. Mr S had signed that proposal.

e) Mr Smith, who gave evidence on behalf of Mr S , confirmed that he never authorised Mr S to seek money from anyone on the basis that it was “to assist his friend Paul Cameron with a new project and to repay some of Paul’s short-term debt”. Indeed, Mr Smith said that he did not know anyone by the name of Paul Cameron.

f) Mr S was involved in authorising disbursement of the funds from the lender. Were this a genuine commercial transaction undertaken on behalf of Mr Booth, there would have been no reason to arrange for cheques to be issued directly from Basecorp; the money would have been disbursed in the usual way through the trust account of the solicitor acting for the borrower.

g) Mr S knew that the money was not being sought for the registered proprietor of the property. He was aware that the net proceeds of the loan were being paid to Kona Wind and to Mr Dawick. Mr S did not explain why moneys were being paid to Mr Dawick.

[111] The evidence of Mr Orchard on this issue is, for the most part, consistent with contemporaneous documentary evidence. It is generally consistent with the evidence of Mr Mohammed who dealt directly with Mr Orchard, thinking him to be

Mr Booth. In the absence of any sworn evidence to support the proposition that another person was also pretending to be Mr Booth, I accept Mr Orchard’s evidence on this topic.

[112] For those reasons, all elements of the offence charged in count 1 have been proved beyond reasonable doubt. Mr S was found guilty on that charge.

JOHN KENNETH SLAVICH on or about the 29th day of October 2002 at Hamilton made a false document namely an Authority to Disburse Funds purportedly signed by Justin Murray Booth knowing it to be false with the intent that it should be acted upon as genuine.

[114] The charge is one of forgery and is based on s 264 of the Act. Section 264, in the form in which it stood in October 2002, stated:

(1) Forgery is making a false document, knowing it to be false, with the intent that it shall in any way be used or acted upon as genuine, whether within New Zealand or not, or that some person shall be induced by the belief that it is genuine to do or refrain from doing anything, whether within New Zealand or not.

(2) For the purposes of this section, the expression “making a false document” includes making any material alteration in a genuine document, whether by addition, insertion, obliteration, erasure, removal, or otherwise.

(3) Forgery is complete as soon as the document is made with such knowledge and intent as aforesaid, although the offender may not have intended that any particular person should use or act upon it as genuine, or should be induced by the belief that it is genuine to do or refrain from doing anything.

(4) Forgery is complete although the false document may be incomplete, or may not purport to be such a document as would be binding or sufficient in law, if it is so made and is such as to indicate that it was intended to be acted on as genuine. (my emphasis)

[115] The term “false document”, which is used in s 264(1), was defined by s 263 of the Act as follows:

(a) Of which the whole or any material part purports to be made by any person who did not make it or authorise its making; or

(b) Of which the whole or any material part purports to be made on behalf of any person who did not authorise its making; or

(c) In which, though it purports to be made by the person who did in fact make it or authorise its making, or purports to be made on behalf of the person who did in fact authorise its making, the time or place of its making, where either is material, or any number or distinguishing mark identifying the document, where either is material, is falsely stated; or

(d) Of which the whole or some material part purports to be made by a fictitious or deceased person, or purports to be made on behalf of any such person; or

(e) Which is made in the name of an existing person, either by him or by his authority, with the intention that it should pass as being made by some person, real or fictitious, other than the person who makes or authorises it.

[116] The Crown case is that Mr S prepared the “Authority to Disburse Funds”, knowing it to be false and with the intent that it should be acted upon as if it were genuine.

[117] Because the document was signed by the man purporting to be Mr Booth after Mr S had prepared it and forwarded it to Mr Mohammed’s office, Mr Douch submitted that Mr S must be regarded as a party to Mr Orchard’s offending. He relied upon s 66(1)(b) of the Act which provides:

(b) Does or omits an act for the purpose of aiding any person to commit the offence; or

[118] Mr McIvor contends that because Mr S did not sign the document he prepared it was not a document “made” by him, for the purposes of s 264(1) of the Act.

[119] In his statement to Police, Mr S acknowledges that he prepared the document. Having regard to my findings on his intent to defraud, he must have known that the document was being prepared for dishonest purposes. Nevertheless, he sent the facsimile from his office on 29 October 2002 to Mr Mohammed, whom he must have known was intended to act on behalf of the man pretending to be Mr Booth.

[120] Plainly, the authority was a “false document” for the purposes of s 264(1). In terms of the definition of “false document” in s 163, “the whole or any material part [of it] purports to be made on behalf of [a] person who did not authorise its making”: para (b) of the definition.

[121] Mr S “made” the document, in the sense that he prepared it and knew that it purported to record authority given by a person who had not, in fact, authorised the transaction. That, in my view, is sufficient to establish that the false document was “made” by Mr S . Plainly, Mr S intended Mr Mohammed to act on the document as if it were genuine.

[122] In R v Walsh (CA208/05, 26 June 2006) it was argued that a document received through facsimile transmission was different from the document made by the accused, the latter being a genuine copy of the former. The issue arose in the context of the same statutory provisions as are in issue in this case. By a majority, the Court of Appeal held that no distinction should be drawn between the document entering the facsimile machine of the sender and the document emerging from the facsimile machine of the recipient.

[19] In terms of s 263(a), a material part of the facsimile message purported to be made by the signatory of the concocted letter when that person did not in fact make it. Mrs Walsh made the document which emerged from the recipient facsimile machine by placing material including the concocted

letter in the sending facsimile machine. She knew the facsimile message that would be received by the recipient facsimile machine was false (because it purported to include a duplicate of a genuine letter when it did not, in fact, do so) and intended it to be acted upon as genuine. In my view, those factors lead to the conclusion that the ingredients of the offence under s 264(1) are established.

[35] In common parlance we speak of a computer document without making any distinction between the document as it is stored in the computer, as it manifests itself on the screen and as it comes off the printer. If that document is sent by e-mail we make no distinction between the document in the hands of the sender and that in the hands of the recipient. It is seen as the same document. The same applies to faxed documents. It is the document itself which is seen as being transmitted and received and not a different document.

[36] It follows therefore that, if a document fed into the facsimile machine is a forgery, then the other physical manifestation of that document (the one received) must also be a forgery and one made by the person who made the original document and fed it into the machine. This is in effect what the Judge directed the jury. By its verdicts the jury must have concluded that the documents fed into the facsimile machine by Mrs Walsh purported to be made by financial institutions (and other institutions) which, to her knowledge, neither made the letters nor authorised their making.

(a) The definition of “false document” in s 263 does not provide that a document is necessarily false if it “tells a lie about itself”. Rather a document is false if it tells about itself one or more of the lies specified in s 263.

(b) The Crown is driven to rely on s 263(a). But this is an extremely awkward fit for the facts of the present case. Recognising that I risk being thought over-literal, I nonetheless consider that each facsimile purported to be made by whoever put the original in the other facsimile machine.

(c) Although this is a literal approach, it is well supported by the authorities, in particular, R v Sorich [1945] NZPoliceLawRp 9; [1945] GLR 267, R v Tait [1968] NZLR 126 and Harbott v Odell HC CHCH AP46/86 15 July 1986. It is also has the not inconsequential support of Glanville Williams, Textbook of Criminal Law (1ed, 1978), at 876. In R v McGrath [1987] 1 NZLR 748, the copy in question purported to have been made by someone other than the appellant and the case is thus not inconsistent with the literal approach.

[126] Although leave to appeal to the Supreme Court has been granted (Walsh v The Queen [2006] NZSC 65), I am bound by the Court of Appeal’s majority decision. I add that I agree with Glazebrook and O’Regan JJ for the reasons they

give. In any event, on the facts of this case, the document entering the facsimile machine was “made” by Mr S for the purposes of para [45](b) of William Young P’s reasons.

[127] Alternatively, I would have upheld the Crown contention that Mr S was a knowing party to the making of the forged document by Mr Orchard. If the unsigned document that entered the facsimile machine was not, in law, a false document “made” by Mr S , he helped Mr Orchard to “make” the document when Mr Orchard signed it in Mr Mohammed’s presence. Mr Orchard would have had nothing to sign had Mr S not sent the authority form to Mr Mohammed. On that basis also, Mr S was a party to the offending and guilty of the offence himself.

JOHN KENNETH SLAVICH on or about the 29th day of October 2002 at Hamilton knowing a document namely an Authority to Disburse Funds in the name of Justin Murray Booth to be forged caused Umarji Mohammed to act upon it as if it were genuine.

[130] Mr Douch made it clear that this charge was an alternative to count 2. Having found Mr S guilty on count 2, no verdict is required on count 3.

Hamilton with intent to defraud used a document capable of being used to obtain a benefit namely a facsimile transmission cover sheet addressed to Legend International from John S and its attachments for the purpose of obtaining for themselves or any other person a benefit.

[132] The same elements must be established in relation to count 5 as was required with count 1. I refer to my discussion of those elements at para [96]-[99].

[133] Count 5 differs from count 1 in the sense that the document was not provided directly to the lender but to a broker.

[134] “Use” can also include provision of a document to an agent who is intended to make it available to a third party who is intended to rely on it: eg R v Fowlds (CA222/00, 13 December 2000) and R v McGrouther [2004] NZCA 23; [2004] 2 NZLR 450 (CA).

[135] It is not necessary that the agent be directed specifically to deal with the document in a particular way, as long as the agent’s handling of the document is a normal and incidental part of the intended transaction: R v Gunthorp [2003] 2 NZLR

[136] There is no doubt that the facsimile transmission coversheet signed by Mr S and the associated documents were documents capable of being used to obtain a benefit, namely money from a loan transaction to be entered into through the agency of the broker. Nor can there be any doubt that Mr S ’s purpose in sending the information was to obtain a benefit for some person. Indeed, he acknowledges that a benefit was sought for entities associated with the Smiths.

[137] Mr S , on his own statement, did not meet anyone who purported to be Mr Hannon. Nor did he speak to a person purporting to be Mr Hannon. Rather, all his dealings were through the person he says he knew as Mr Adams.

[138] The Hannon transaction occurred in close proximity to the Booth transaction. Benefits had been gained by Mr S or his associates through the money

advanced from Basecorp. Mr S accepted in his statement that the Hannon transaction “carried on from the Booth transaction” and involved Mr Adams.

[139] I infer from the evidence that, as Mr S was still seeking money for the fishing venture, he was prepared to embark upon a second transaction with Mr Orchard in order to gain further benefits for those associated with the venture.

[140] I have already found that Mr S knew that the person known to him as Mr Adams was impersonating Mr Booth. It would be implausible to suggest that Mr S did not realise that Adams (Orchard) was impersonating the real Mr Hannon also. Accordingly, there is no reason to doubt Mr Orchard’s evidence that Mr S knew that he was impersonating Mr Hannon.

[141] It is clear that Mr S was intimately involved with the Hannon transaction. His role went well beyond that of a person asked to forward documents by facsimile who had no role in representing the interests of the borrower. Yet, that is the type of role Mr S contended that he had in his statement to the Police: see the extracts from his statement set out at paras [88] and [89] above.

[145] Section 266 of the Act deals with the crime of uttering forged documents. Section 266 provides:

(1) Every one is liable to imprisonment for a term not exceeding 10 years who, knowing a document to be forged,—

a) Mr S knew that the Privacy Act waiver was forged, and b) Used it as if it were genuine.

[147] I am satisfied, beyond reasonable doubt, that Mr S received by facsimile from Ms Gibbs a request for financial information which was accompanied by (among other things) a Privacy Act waiver in the form required by Legend.

[148] Because Mr S never dealt with the real Mr Hannon, he arranged for the document to have been signed by contacting Mr Adams (Orchard). Mr Orchard said that he signed the document pretending to be Mr Hannon and that he would have signed it at Mr S ’s office.

[149] I test Mr Orchard’s recollection of events by reference to Mr S ’s statement to the Police. Mr S acknowledged that documentation on his file that was signed by Mr Hannon was given to him by Mr Adams (Orchard) as part of the material he sent to Legend.

[150] Ms Gibbs’ evidence is that she was contacted on the morning of 6 November

2002 by telephone by a man who identified himself as Mr Hannon. It was during the

course of that telephone discussion that the name of Mr S was provided to her. While there is no evidence of the time at which the request for financial information was sent by Ms Gibbs to Mr S , the evidence does establish that Mr S responded, with the requested information, at 10.54am on the same day.

[151] The speed with which Mr S was able to assemble the material (remembering that it was the waiver sent by Legend that had to be signed) to respond to Ms Gibbs’ request gives credence to Mr Orchard’s evidence that the document was signed at Mr S ’s office. The only alternative is that it must have been signed somewhere else in Hamilton at a location proximate to Drew Bullen’s offices.

[152] Mr Orchard’s evidence on this topic accords substantially with the overall effect of the circumstantial evidence. I find as a fact that the document was signed in Hamilton by Mr Orchard, before 10.54am on 6 November 2002. I find also that Mr S knew that the real Mr Hannon had not signed the document.

[153] I am satisfied, beyond reasonable doubt, that Mr S knew the Privacy Act waiver purportedly signed in the name of Mr Hannon and addressed to Legend was forged yet sent it to Legend (and thereby “used” it) as if it were genuine as part of the material required to support the loan application.

[155] Count 8 also arises out of the Hannon transaction. It alleges forgery. Count

JOHN KENNETH SLAVICH on or about the 8th day of November 2002 at Hamilton made a false document namely a Authority to Disburse Funds addressed to Bruce Dell Law knowing it to be false with the intent that it shall be acted upon as genuine.

[156] I have already identified the elements to be proved on a charge of forgery. I

[157] The document in issue is the direction given to Bruce Dell Law to disburse the proceeds of the loan from Yidam and Mr Hannon.

[158] A computer analyst called by the Crown, Mr Bennett, has deposed that the Authority to Disburse Funds addressed to Bruce Dell Law was created within the Drew Bullen computer system on 8 November 2002.

[159] Mr S accepted, in his statement to Police, that the authority was prepared by him from information provided by the man whom he knew as Mr Adams.

[160] It was necessary for an authority to be drawn up in anticipation of the attendance by the imposter on the solicitor at Bruce Dell Law for the purpose of executing documents and authorising disbursement of funds. That was precisely the same procedure as had been undertaken when the fraud upon Mr Booth had been perpetrated.

[161] Mr S knew that the Authority to Disburse Funds had not been prepared on the authority of the real Mr Hannon: see para [140] above. In preparing the document Mr S made a false document, in the sense that it was known to be made without proper authorisation. Mr S intended that the authority be acted upon by Bruce Dell Law as if it were a genuine document issued on behalf of the real Mr Hannon.

[162] I am satisfied that the elements of the offence of forgery have been established beyond reasonable doubt. For those reasons, Mr S was found guilty on count 8.

JOHN KENNETH SLAVICH on or about the 25th day of November 2002 at Hamilton without colour of lawful authority made a document namely a Deed dated the 15th day of November 2002 purportedly between Richard Capewell Hannon, John Kenneth S and others.

[164] Count 10 arises out of the Hannon transaction. The Crown alleges that Mr S created this document in an endeavour to distance himself from involvement in what he knew was a fraudulent transaction.

Every one is liable to imprisonment for a term not exceeding 10 years who, without colour of lawful authority, makes or executes, draws, signs, accepts, or endorses in the name or on the account of another person, by procuration or otherwise, any document, or makes use of or utters any such document knowing it to be so made, executed, drawn, signed, accepted, or endorsed.

[167] Mr Bennett deposed that the origin of the Deed dated 15 November 2002 was the computer system at Drew Bullen. The last recorded author who dealt with the document was “John”. Mr Bennett opined that the document was created on 25

[168] In his statement to Police, Mr S acknowledges that he was the author of the Deed. His position, however, was that it reflected a genuine agreement and was made on 15 November 2002.

[169] Mr Pook, a computer systems engineer, was called to give evidence on behalf of Mr S . Mr Pook had designed the Drew Bullen computer system. He assisted with retrieval of information from the Drew Bullen computer system when

the search warrant was executed. At the time he was working for the entity that provided information technology to Drew Bullen.

[170] Mr Pook also analysed the Deed dated 15 November 2002. He confirmed that the document had a “creation date” of 25 November 2002. That evidence conforms with that given by Mr Bennett.

What does it mean when it says that 25 November 2000 to 8.03am, when it says the document’s created?..... That is the time that the document was actually, or last saved as a different file name. Ah, this document has had several file names over its time. It looks to me as if it was a document that was used as a, a base template, um, and then saved, someone would alter information in it, save it and then use it for something else again, and then save it again. Um, the creation date is the date that the document was last saved as a file name. So every time you change the name of the document, it will actually erase the old creation date and create a new creation date. It also erases all of the editing time and histories as well, because it treats it as a brand new document.

Right, so because the history shows a Hannon document, are you able to comment on when the Hannon document was created or not?..... There is no, ah, information in the history as to exactly when it was created, ah, apart from the fact that it was originally created on a, a PC that was not the PC, ah registered with a copy of Word registered to John. It also was, ah, living on a floppy disk, um, for an unknown period of time beforehand, had been modified and saved as another, you know, used for another purpose, um, this Halifax.P and then modified again before it was saved up to the Drew Bullen server. Ah, the time of 8.03am is the time that it was actually saved as Hannon.doc to the Drew Bullen server. Each time it’s gone through a name change the creation date has changed.

Right. So, 25 November 2002 creation date. Again, correct me if I’m wrong, are you saying that that just means it was saved again under that name, or?..... That is correct.

But you can’t tell when it was created. Sorry, when I say “created” I mean the document actually made?..... Ah, I cannot, um, the, the original document, ah, that had been used over and over again, it appears to me has been around an existence since before May 2001, if you look at the last print date.

[172] Mr Pook was later asked whether the document could have been in existence before 25 November 2002. He responded:

... Ah, in my opinion it would have existed before the 25^th, ah, given the fact that it had actually come in, um, on a floppy disk, um, and that it had come from a different computer or a different, a computer with a different copy of

Word on it, ah, seeing as Word is actually registered to a user and, ah, as you can see it’s recorded in there, that, um, all the revisions are on a copy of Word that’s registered to Chrissy Rowe until the first time it’s saved as Halifax which is the first copy of Word that’s registered to John.

[173] In cross-examination, Mr Douch sought to explain the effect of Mr Pook’s testimony and to minimise any adverse impact it may have. The following exchange occurred:

Mr Pook, if we look at the last 10, or particularly the last two, does that tell us that the document as it existed on John’s computer?..... Mmhm.

And so there’s a document in the form that’s referred to by him under the heading of Halifax?..... Yes.

In terms that it relates to so you can go back and access it simply, isn't it?..... Mmhm.

And then it’s been opened again on the 25^thof November 2002 and it’s been saved not as Halifax but it’s Hannon?..... That is correct, mmm.

And the need to save the document is initiated by what?..... Usually by, ah, modification.

Yes, because you just you know if you call up a document and you look at it you just -?..... Yes.

You know whack the cross and it goes away but if you've been fiddling around you get “do you want to save changes” and -?..... Mmm.

So that’s telling us, isn't it, that on the 25^thof November this Hannon document was called up on John’s computer, changed from “Halifax” document to “Hannon” document suggesting some change in its format?..... Yes.

[174] I am satisfied from the evidence of both Mr Bennett and Mr Pook that the document was saved, for the first time, as a “Hannon” document on 25 November

2002. On that basis I find that the “creation” date of the particular Deed in issue was

[175] There is additional evidence to support the contention that the Deed was not bought into existence until 25 November 2002.

[176] In his statement to Police, Mr S acknowledged that he had never spoken to a person purporting to be the real Mr Hannon. There is no evidence from which any inference could be drawn that Mr S had authority from the real Mr Hannon to prepare the document. Mr S ’s statement recorded that all of his information came through the person whom he knew as Mr Adams. But, on 14

November 2002, the man he knew as Mr Adams had been arrested and taken into custody.

[177] The document purports to have been signed on 15 November 2002 by all parties other than Mr Hannon. Evidence was given by Mr Smith of his travels within the Pacific Islands on behalf of the fishing venture for which the loan moneys were required. Mr Smith travelled to Fiji and arrived in that country on 28 October

November 2002, where he was to take control of a vessel and sail it back to Fiji. Mr Smith returned to Fiji on 12 November 2002. He left Fiji on 15 November 2002, arriving back in New Zealand the same day. He left for Los Angeles on 22

[178] Mr Smith gave evidence that he usually drove from Auckland Airport to Tauranga and that the Deed had been signed by himself, his wife and Mr S at the residence of a friend in Tauranga at his home address. The friend witnessed signatures and added his residential address. Notwithstanding the fact that Mr Smith said it was not unusual for Mr S to be waiting for him at home in Tauranga when he arrived back from overseas, there is no evidence to establish Mr S ’s whereabouts that day. I take the view that it is improbable that any document was executed in Tauranga on 15 November 2002 by both Mr Smith and Mr S .

[179] Another document exists that was created by Mr S . In its form, it bears all the hallmarks of the Deed dated 15 November. The second Deed is dated 29

November 2002 and is plainly designed to exculpate Mr S by providing evidence of the discovery of an elaborate fraud.

[180] The 29 November 2002 document, with one exception, purports to be between the same parties as the 15 November 2002 deed. The preamble to the 29

A. The [trustees of the Albacora Trust] are the owners of the fishing vessels Albacora and Dolphin Free (“the vessels”).

B. The [trustees of the Albacora Trust] entered into a loan agreement with a Mr Richard Hannon (copy of agreement attached). It is now known that the advance was part of an elaborate fraud and that someone was pretending to be Mr Hannon to obtain mortgage funds. The [trustees of the Albacora Trust] and [Mr S ] do not wish to be associated with the fraud and wish to repay the advance.

C. The [Pennies From Heaven Ltd] has agreed to provide loan funds for that repayment. In consideration the [Pennies From Heaven Ltd] also has an option to purchase into or invest on the same basis as any other “seed money funder” into a Fiji tourist resort venture currently being investigated by [Mr Smith], this venture is only at a initial investigation stage.

E. The [trustees of the Albacora Trust] will repay the lender from the fishing catch of the vessels.

F. The parties have agreed to certain arrangements, terms and conditions pursuant to which this agreement will be performed and these are set out in this agreement.

G. [Mr Smith] has agreed to guarantee the obligations of the owners. (my emphasis)

[181] Pennies From Heaven Ltd is named in place of Mr Hannon as lender. A copy of the document was located at an office used by Mr McKelvy, a person who was intimately connected with the Booth fraud.

[182] All of that evidence tends to support Mr Bennett’s conclusion that the deed dated 15 November 2002 was created on 25 November 2002 as part of continuing efforts by Mr S to distance himself from the fraudulent conduct in which he had engaged.

[183] I am satisfied beyond reasonable doubt that Mr S created the document dated 15 November 2002 without lawful authority from Mr Hannon to do so. I am

satisfied that the document was drawn in an endeavour to distance himself from the fraud practised upon the real Mr Hannon, to which he had been a party.

[184] All elements of the charge contained in count 10 have been proved beyond reasonable doubt. For those reasons, I found Mr S guilty on count 10.

High Court of New Zealand Decisions

R v S HC Hamilton CRI 2006-419-89 [2006] NZHC 1224 (12 October 2006)